Press release - Be conditioned to check conditions, warns ITIC
International Transport Intermediaries Club (ITIC) - a mutual insurer that provides professional indemnity cover for transport intermediaries operating in the marine, offshore, renewable and aviation industries – has urged ship managers to be more vigilant about checking the condition of their vessels when they take them on following a recent claim that ITIC handled.
Managers were responsible for a ship between 2014 to 2017 subject to a shipman contract. After the ship was redelivered, the managers were notified of a claim from the owners, who alleged that they had suffered losses exceeding US$ 500,000 due to the managers negligence.
However, this negligence was not fully detailed.
In anticipation that a formal claim might follow, ITIC arranged for surveyors to inspect the ship and prepare a report to assess and/or defend any such claim. This report noted several deficiencies in the ship's condition upon its redelivery to the owners, many of which the surveyor believed should have been rectified by the managers prior to redelivery.
One issue for the managers in defending any such claim was the lack of evidence regarding the ship's condition when they first took it on. The managers had not undertaken any surveys at that point or thereafter, a practice that ITIC always recommends managers do when taking on any vessel.
About 12 months later, the owners’ lawyers sent a demand for US$ 800,000, which included repair costs, off-hire costs, and bunkers that they alleged stemmed from the managers’ negligence. The owners’ commenced arbitration.
The claim was ultimately settled for US$ 250,000. This offer considered the litigation risk and the difficulty the managers were likely to have in evidencing what they thought to be the condition of the vessel when they took over the management.
It also accounted for the fact that the next stage in the arbitration was to have witness statements taken, which would have cost at least US$ 50,000. These costs were avoided.
For further information please contact:
Margaret Mentz, Navigate PR
T: +44 203 326 8461
International Transport Intermediaries Club (ITIC) is the world’s leading provider of professional indemnity insurance to transport professionals across the globe.
As a mutual insurer, it has over 90 years’ experience providing cover to companies in the marine, naval architecture, aviation, rail, offshore and hydrographic industries. With 3,100 members in over 110 countries and with a worldwide network of correspondents, ITIC is the acknowledged leader in its field.
ITIC’s insurance has been developed primarily to cover claims of negligence – errors or omissions. Cover can also extend to specialist areas such as debt collection, loss of commission income, cyber liability, cash in transit and directors’ and officers’ insurance. ITIC’s wide cover also includes a unique discretionary insurance which could support claims not normally be paid by other professional indemnity insurers.
ITIC is managed by Thomas Miller. More details about ITIC and the services it offers can be found at www.itic-insure.com